With the South African Post Office, the cheque’s always in the mail…
Let’s be honest, if the South African Post Office was one of your employees, you would have fired it a long time ago.
For a start, it missed all but two of its 15 performance targets for the year ending 31 March 2025. Targets such as generating R1 million in warehousing revenue, growing logistics revenue by 16% and establishing an eCommerce mall to support small business development. It also failed to hit a key KPI of resolving all customer complaints recorded at the call centre within seven days.
It even, wait for it, failed to achieve the regulated mail delivery standard. Which drops the average South African squarely in the doo doo when it comes to receiving anything through the post. It’s not as though we’re exactly spoiled for choice for other options.
And in some case, there simply isn’t another option, thanks to the Post Office’s licence, which grants it “exclusivity of reserved postal services where it has monopoly over sub 1 kg items.”
I mean, you essentially had ONE JOB, Post Office…
It’s total score was a dismal 13%, and recorded a net loss of R2.17 billion.
The Post Office’s issues became so unsustainable that it was placed under business rescue in 2023. The initial provisional liquidation order was set aside, and Messrs Anoosh Rooplal and Juanito Damons were appointed as joint business rescue practitioners (BRPs). They have since assumed full responsibility of the Post Office’s Board of Directors and the Accounting Authority.
Now, I could be wrong, but it seems as though the Business Rescue plan they implemented in December that same year is not doing a particularly good job of rescuing the businesses.
Despite taking drastic measures, such as retrenching around 4 800 workers (about 43% of its workforce) in March and April last year, the closing of a third of the Post Office’s branches, and R2.4 billion in funding from the fiscus in 2023/24, the company continues to circle the drain. It reported total revenue of R1.6 billion, almost a third lower than the comparative period the previous year.
According to the BRPs, the Post Office needs another R3.8 billion in funding if they are to successfully, and fully, implement the approved Business Rescue Plan.
This surely is as ludicrous as an underperforming staff member coming to you and saying, “I know my performance hasn’t been good enough for a very long time, but could I have a massive raise anyway?”
Any business leader would find that scenario comical in its absurdity, but yet that’s exactly what we’re expected to condone for our beleaguered Post Office.
The spin doctors expect us to get excited by the fact that the SAPO’s total operating expenses declined during the period under review, and its assets now outweigh its liabilities.
The only reason for that, however, is because it’s retrenched a massive chunk of its workforce and closed hundreds of branches to avoid complete collapse.
I’m generally not one to get over sentimental and nostalgic about things, but the catastrophic decline of the SAPO can only be described as tragic. Since its beginnings in a small office in Cape Town in 1792, the Post Office has delivered an uninterrupted service to its customers for well over 200 years.
It’s tempting to attribute much of the current problem to changing consumer habits – people email more than they send letters in the post, for example. Reports hint at a decline in letter-post services of as much as 50%.
Despite this, however, many countries, such as the US, China, Egypt and Brazil, still have thriving postal services employing thousands of people.
Here at home, in addition to regular households, organisations such as hospitals, the South African Police Service, the High Courts, lawyers, and many state and local government departments still rely on the Post Office to send and receive documents by mail.
Unlike South Africa, instead of blaming technology advances, many post offices around the world are capitalising on the opportunities it presents. They’re making themselves invaluable to online retailers, for example, by offering specialised services such as next day delivery and flexible, responsive delivery options.
They’re also leveraging commonly available technology, such as blockchain, drones, and 3D printing to reduce costs, enhance customer experience and improve overall efficiency.
Efficiency is unarguably one of the many areas where our Post Office is falling woefully short.
In his report towards the end of 2023, Solly Malatsi, the Minister of Communications and Digital Technologies, said the SAPO’s financial stability had been “undermined by unsustainable costs, operational inefficiencies, and a failure to modernise.”
Although he hit the nail squarely on the head with all three, that’s apparently where his insight ended. There was a noticeable lack of follow up on how he plans to address any of these issues.
In trying to find any semblance of an actual strategy, I came across what can only be described as a tome, entitled, South African Post Office Corporate Plan, 2025/26 – 2027/28.
Jackpot! Or so I thought.
The Plan is an exceptionally wordy, 81-page document that outlines how, in accordance with its newly-minted Business Rescue Plan, the Post Office plans to “prioritise its business modernisation, digital transformation, cost efficiency, and workforce restructuring.” Apparently, “every decision will be driven by a commitment to operational excellence and financial prudence to ensure that SAPO emerges stronger and more resilient.”
There are pages of self-flagellating, Mea culpa content, confessing to ageing infrastructure, outdated logistics systems and IT platforms, and decaying physical facilities, all of which have “contributed to a loss of customer trust, as inconsistent service delivery and inefficiencies have created dissatisfaction among SAPO’s stakeholders.”
Then there is an even great number of pages dedicated to the “five key objectives that will drive [the Post Office’s] modernisation and secure the organisation’s sustainable future.”
The first of these objectives is “Financial Stability,” but we don’t get to the actual Financial Plan until page 47 – and then it only really deals in vagueness: “The SA Post Office aims to effectively manage the long-term decline of its traditional activities while driving the development of growth areas, particularly in e-commerce and digital services.”
Not mention of how, or where the money’s going to come from – apart from a much later mention of “Public-private partnerships (PPPs)” that will “Leverage partnerships to co-fund and execute strategic initiatives, particularly those that contribute to diversifying revenue streams, leveraging the postal infrastructure, and optimising SAPO’s logistics capability.”
It’s all very long on words but very short on any kind of tangible action plan.
And we don’t even see a whisper of anything to do with improving corporate governance and tackling fraud until pages 70 and 71.
Sadly, it seems the Post Office is sticking to the tried and tested formula used so frequently by other failing SOEs – spend a lot of money on expensive task forces, think tanks and marketing documents that make it sound as though you have a workable, actionable plan and a strategy for how to implement it.
The reality, as always, however, is that while a lot gets said, very little gets done. And, once again, it’s the South African consumer who bears the brunt of the lack of accountability and action.
In a Press release issued late last year, Anoosh Rooplal, one of the BRPs, said, “We believe that the Post Office can again play a unique role in South Africa and must be supported. It can be an efficient postal service provider and a lifeline for many South Africans, offering them affordable access to vital communication and financial services.”
I guess, as we’re so used to doing for our mail, all we can do is wait…